Test Bank Ethics In Accounting A Decision-Making Approach 1st Edition by Gordon

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INSTRUCTOR TEST BANK – CHAPTER 5

MULTIPLE CHOICE

 

  1. The Becker Rational Model is an economic model that weighs:
  2. The likely benefits from cheating against the likely costs
  3. The actual marginal benefits from cheating against the actual marginal costs
  4. The magnitude of harm that likely will arise from cheating against the probability of cheating being detected
  5. The expected maximum benefits from cheating against the expected maximum costs

 

SOLUTION: A

 

  1. According to the issue-contingent model, the importance of an ethical issue to people generally does not depend on the degree to which an issue:
  2. Has an impact that is distant in time
  3. Affects members of one’s own cultural group
  4. Has an impact on the religious tenets of a society
  5. Has a high probability of harm

 

SOLUTION: C

 

  1. The Becker Rational Model would likely be most helpful in:
  2. Assisting law enforcement authorities in setting the level of punishment imposed on a particular cheater after unlawful behavior has occurred
  3. Assisting potential cheaters in assessing the expected likelihood of getting caught
  4. Assisting potential cheaters in assessing the expected punishment they will endure, if and when they are caught
  5. Assisting potential cheaters in assessing the net economic gains they will garner from cheating

 

SOLUTION: D

 

  1. Your expected gain from cheating is $600. The expected financial penalty from cheating is $300 and the expected probability of your cheating being detected is 25%. You also will experience a loss of self-esteem that has an estimated value to you of $500, whether or not your cheating is detected. You are likely to:
  2. Cheat, due to the copycat effect
  3. Not cheat, due to moral compartmentalization
  4. Cheat, applying the principles expressed by the Becker Rational Model
  5. Not cheat because cheating would be irrational

 

SOLUTION: C

 

  1. People who cheat are more likely to do so when:
  2. The line separating an ethical act from an unethical act is unclear
  3. The line separating an ethical act from an unethical act is clear
  4. They are well-rested
  5. They have a low self-image, but consider their self-image to be important

SOLUTION: A

  1. A homeowner would never steal money from her neighbors, but she does not hesitate to cheat on paying her dues owed to the local Homeowners’ Association. This homeowner’s actions can best be explained by the concept of:
  2. Moral compartmentalization
  3. Moral reminders
  4. The proximity effect
  5. The magnitude of the consequences effect

 

SOLUTION: A

 

  1. The “Dead President’s” Effect refers to people’s propensity, when cheating, to:
  2. Favor monetary rewards over nonmonetary rewards
  3. Prefer liquidity over illiquidity
  4. Favor rewards that are vivid and simple to understand over rewards that are abstract and complex
  5. Refrain from stealing cash

 

SOLUTION: D

 

  1. When there is no chance of their cheating being detected, some people do not cheat at all. This conclusion is:
  2. Consistent with the Becker Rational Model
  3. Inconsistent with the Becker Rational Model
  4. Consistent with the “cheater’s high” theory
  5. Consistent with the “depleted resistance” theory

 

SOLUTION: B

 

  1. When the probability of cheating being detected is zero, the Becker Rational Model predicts that people will:
  2. Cheat, without limit
  3. Cheat, by weighing the clear-cut benefits against the uncertain harm to their self-esteem
  4. Not cheat at all if they are believers in virtue ethics
  5. Not cheat, as long as the severity of punishment in society is severe

SOLUTION: A

 

 

  1. According to many behavioral scientists, the degree to which people cheat varies inversely with:
  2. Their social status
  3. Their financial and wealth status
  4. The degree to which they value their self-image
  5. The degree to which they have close family interactions

 

SOLUTION: C

 

  1. The term “proximity,” as it is used in the issue-contingent model, describes:
  2. The immediacy with which harm is expected to occur
  3. The geographic distance between the location where harm occurs and the location of the decision-maker
  4. The degree of likelihood that harm actually will arise
  5. A person’s affinity for the person or group harmed

 

SOLUTION: D

 

  1. The overconfidence bias:
  2. Leads people to have an exaggerated fear of loss
  3. Leads people to overestimate the risks inherent in generating a possible gain
  4. Leads people to unduly fear losses
  5. Leads people to unduly minimize the odds of loss

 

SOLUTION: D

 

  1. According to behavioral psychologists, which of the following compensation packages would most people rank as the least desirable?
  2. A guaranteed base salary of $54,000
  3. A base salary of $50,000, plus a 50% chance of earning a $4,000 bonus for meeting minimum productivity requirements
  4. A base salary of $54,000, with a 50% chance of sustaining a $4,000 penalty for failing to meet minimum productivity requirements
  5. Choices (b) and (c) are, by an overwhelming majority of people, ranked as being equally undesirable

 

SOLUTION: C

 

 

  1. Many people choose to submit payroll forms to their employers that result in more income taxes being withheld than these employees actually will owe in income taxes. According to behavioral scientists, the most likely explanation for this behavior is that:
  2. The IRS, in paying tax refunds, pays generous interest rates on excess amounts withheld from taxpayers’ earnings during the year
  3. Over-withheld taxes are viewed favorably by credit reporting agencies, which enhances taxpayers’ self-esteem
  4. The principle of loss aversion
  5. The principle of moral reminders

 

SOLUTION: C

 

  1. In the Issue-Contingent Model, the term “temporal immediacy” refers to the notion that issues evoke a stronger emotional response when they:
  2. Are magnified, or replicated, by a copycat effect
  3. They induce brain activity in the temporal lobe
  4. They have a present-day impact
  5. Their future impact can be estimated instantly and easily

 

SOLUTION: C

 

 

ESSAYS/SHORT ANSWER

 

  1. Pick a close friend. How important is the maintenance of a high self-image to this friend? Provide examples.

 

  1. How important is the maintenance of a high self-image to you? Provide examples in which you took actions to augment your self-image.

 

  1. What criticisms do you have of the Becker Rational Model?

 

  1. Why did the 9/11 attack evoke such a high degree of moral outrage? Analyze it by applying the issue-contingent model.

 

  1. Does our college have a student ethics code? What impact, if any, does it have on your behavior? Could a student ethics code be made more effective?

 

  1. Why is it important to you for our college’s basketball team to win a game against our arch-rival?